Century Enka Limited, Kolkata V. CIT - II, Kolkata, Kolkata

ITA 774/KOL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87594 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 02-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2011
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA; RAJEND
• Keywords: Revision of order; Depreciation; Additional depreciation; Question of law; Unabsorbed depreciation
• Section: 143(3); 32; 263; 11

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA ( ) BEFORE , /AND , ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA , AM ] / I.T.A NO. 560 /KOL/20 1 0 / ASSESSMENT YEAR : 200 6 - 0 7 CENTURY ENKA LIMITED VS. DEPUTY COMMISSIONER OF INCOME - TAX, (PAN: AABCC2491D) CIRCLE - 6, KOLKATA ( /APPELLANT ) ( / RESPONDENT ) & / I.T.A NO. 774 /KOL/201 1 / ASSESSMENT YEAR : 200 6 - 0 7 CENTURY ENKA LIMITED VS. COMMISSIONER OF INCOME - TAX - II, (PAN: AABCC2491D) KOLKATA ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING: 0 1 . 12 .201 4 DATE OF PRONOUNCEMENT: 02 . 01 .201 5 FOR THE APPELLANT : SHRI NAGESWAR RAO, ADVOCATE FOR THE RESPONDENT : SHRI VARINDER MEHTA , CIT & SHRI RAJENDRA PRASAD, JCIT / ORDER PER SHRI MAHAVIR SINGH, JM : BOTH THE APPEALS FILED BY ASSESSEE ARE AGAINST THE SEPARATE ORDER S OF CIT(A) - VI, KOLKATA AND CIT - II, KOLKATA , IN APPEAL NO. 583/CIT(A) - VI /07 - 08/CIRCLE - VI DATED 11.01.2012 AND AGAINST REVISION ORDER PASSED VIDE M. NO. CIT, KOL - II/U/S.263/C - 4/2009 - 10/6484 - 86 DATED 30.03.2011 RESPECTIVELY. ASSESSMENT W AS FRAMED BY DCI T , CIRCLE - 6, KOLKATA U/S. 143(3) R.W.S. 115WE(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR ASSESSMENT YEAR S 2006 - 07 VIDE HIS ORDER DATED 05 .12.2008 . 2. FIRST OF ALL WE WILL DEAL WITH ITA NO. 560 /KOL/201 0 FOR THE ASSESSMENT YEAR 2006 - 07 . THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) DENYING THE CLAIM FOR ADDITIONAL DEPRECIATION . FOR THIS, ASSESSEE HAS RAISED FOLLOWING THREE GROUNDS OF APPEAL: 1(A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DENYING THE APPELLANT S CLAIM FOR ADDITIONAL DEPRECIATION OF RS.78,03,220/ - IN THE SUBJECT AY (I.E. AY 2006 - 07). 1(B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DENYING THE APPELLANT S CLAIM FOR ADDITIONAL DEPRECIATION OF RS.78,03,220/ - IN THE SUBJECT AY (I.E. AY 2 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 2006 - 07), BEING HALF OF AGGREGATE ADDITIONAL DEPRECIATION ENTITLED TO THE APPELLANT ON THE GROUND THAT CARRY FORWARD OF ADDITIONAL DEPRECIATION IS NOT PERMISSIBLE AS PER THE PROVISIONS OF THE ACT. 1(C) WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DISREGARDING THAT THE APPELLANT IS IN THE BUSINESS OF GENERATION OF POWER WHICH IS COVERED UNDER SECTION 32(1)(I) OF THE ACT AN D THEREFORE, THE APPELLANT IS ELIGIBLE FOR ADDITIONAL DEPRECIATION IN ACCORDANCE WITH PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING OF POLYESTER FIBRE S AND YARNS. THE ASSESSEE HAS CAPTIVE POWER PLANT IN ITS UNIT AT BHARUCH, GUJARAT. THE ASSESSEE DURING THE FINANCIAL YEAR 2004 - 05 RELEVANT TO THE ASSESSMENT YEAR 2005 - 06 MADE A CLAIM OF ADDITIONAL DEPRECIATION U/ S 32(1) (IIA) OF THE ACT ON ASSETS PROCURED DURING THIS YEAR, WHERE FULL EFFECT OF ADDITIONAL DEPRECIATION WAS NOT ALLOWED/CLAIMED FOR THE REASON THAT THOSE WERE PUT TO USE FOR LESS THAN 6 MONTHS . DURING ASSESSMENT YEAR 2005 - 06, 50% OF ADDITIONAL DEPRECIAT ION WAS CLAIMED AND ALLOWED. BALANCE 50% DEPRECIATION WAS CLAIMED IN FINANCIAL YEAR 2005 - 06 RELEVANT TO ASSESSMENT YEAR 2006 - 07, THE YEAR UNDER CONSIDERATION, BUT THE ASSESSING OFFICER DISALLOWED ONLY FOR THE REASON THAT THE ADDITIONAL DEPRECIATION IS ALLO WABLE TO AN ASSESSEE, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING , WHO ARE ELIGIBLE FOR DEPRECIATION U/S.32(1)(IIA) OF THE ACT. ACCORDING TO THE ASSESSING OFFICER, AN ASSESSEE ENGAGED IS NOT ELIGIBLE FOR ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT. HE ADMITTED THAT IN ASSESSMENT YEAR 2005 - 06, EVEN THOUGH THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF GENERATION OR GENERATION AND DISTRIBUTION OF POWER WAS ALLOWED ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT. FOR THIS HE OBSERVED THAT, THEREFORE, NOTWITHSTANDING THE DECISION TAKEN IN ASSESSMENT FOR A/Y - 05 - 06, THE CLAIM OF ADDITIONAL DEPRECIATION ON THE ASSETS PURCHASED FOR THE POWER PLANT DOES NO T QUALIFY FOR THE SAME. THEREFORE, CLAIM OF ADDITIONAL DEPRECIATION IS DENIED FOR RS.78,03,220/ - . AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF THE AO . AGGRIEVED, NOW ASSESSEE IS IN SECOND APPEAL BEFORE TRIBUNAL. 4. WE FIND THAT NOW THE ISSUE ON PROPOSITION OF LAW REGARDING ALLOWANCE OF REMAINING ADDITIONAL DEPRECIATION IN THE NEXT ASSESSMENT YEAR U/S.32(1)(IIA) OF THE ACT IS COVERED IN FAVOUR OF ASSESSEE AND AGAINST REVENUE BY THE DECISION OF CO - ORDINATE BENCH O F ITAT KOLKATA A BENCH IN THE CASE OF BIRLA CORPORATION LTD VS. DCIT IN ITA NO.683/KOL/2011 FOR THE ASSESSMENT YEAR 2007 - 08 DATED 8 - 12 - 2014 , WHEREIN IT IS HELD AS UNDER: - 15. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS ARE ADMITTED AND THERE IS NO DISPUTE ON THE FACTS. ONLY ISSUE FOR 3 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 ADJUDICATION IS WHETHER THE ASSESSEE IS ENTITLED FOR THE BALANCE 50% ADDITIONAL DEPRECIATION IN VIEW OF SEC. 32(1)(IIA) OF THE ACT IN THE NEXT ASSESSMENT YEAR FOR REMAI NING UNUTILIZED ADDITIONAL DEPRECIATION. WE HAVE GONE THROUGH THE RELEVANT PROVISIONS OF SECOND PROVISO TO SECTION 32(1)(II) AND 32(1)(IIA) OF THE ACT. IN THE PRESENT CASE BEFORE US, THE ASSESSEE HAS PURCHASED AND INSTALLED NEW PLANT AND MACHINERY FOR IT S MANUFACTURING UNIT AND PUT TO USE FOR A PERIOD OF LESS THAN I.E. 180 DAYS, DURING THE FY 2005 - 06 RELEVANT TO AY 2006 - 07 AND CLAIMED 50% ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT IN VIEW OF THE SECOND PROVISO TO SECTION 32(1)(II) OF THE ACT. FUR THER, THE BALANCE 50% OF ADDITIONAL DEPRECIATION ON SUCH PLANT AND MACHINERY HAS BEEN CLAIMED BY THE ASSESSEE COMPANY DURING THE YEAR UNDER CONSIDERATION I.E. THE FY 2006 - 07 RELEVANT TO THIS ASSESSMENT YEAR 2007 - 08. A BARE READING OF CLAUSE (IIA) OF SECTI ON 32(1) OF THE ACT W.E.F. THE AY 2006 - 07, PROVIDES FOR ALLOWANCE OF ADDITIONAL DEPRECIATION EQUAL TO 20% OF ACTUAL COST OF NEW PLANT AND MACHINERY ACQUIRED AND INSTALLED AFTER MARCH, 31 ST 2005 BY AN ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODU CTION OF ANY ARTICLE OR THING. SUCH ADDITIONAL DEPRECIATION IS TO BE ALLOWED AS DEDUCTION U/S. 32(1)(IIA) OF THE ACT BUT SECOND PROVISO TO SECTION 32(1)(II) RESTRICTS THE ALLOWANCE OF DEPRECIATION AT 50%, IF THE PLANT AND MACHINERY IS ACQUIRED DURING THE PREVIOUS YEAR IS PUT TO USE FOR A PERIOD OF LESS THAN 180 DAYS IN THAT PREVIOUS YEAR. THE SECOND PROVISO SPECIFICALLY MAKES A REFERENCE TO AN ASSET REFERRED TO IN CLAUSE (IIA) OF THE SAID SECTION 32(1) OF THE ACT. AND IT IS BECAUSE OF THE SECOND PROVISO ASSESSEE CLAIMED ONLY 50% ADDITIONAL DEPRECIATION FOR AY 2006 - 07 AND ACCORDINGLY, CLAIMED THE BALANCE AMOUNT OF ADDITIONAL DEPRECIATION IN THE IMMEDIATELY SUBSEQUENT YEAR I.E. THE YEAR UNDER CONSIDERATION AY 2007 - 08. WE ARE IN FULL AGREEMENT WITH THE ARGUM ENT OF SHRI J. P. KHAITAN, SENIOR ADVOCATE THAT A BARE READING OF SECTION 32(1)(IIA) CLEARLY SHOWS THAT THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION IN CASE THE NEW MACHINERY AND PLANT WAS ACQUIRED AND INSTALLED AFTER 31 - 03 - 2005. THERE IS NO RESTR ICTIVE CONDITION IN THE CLAUSE FOR THE ELIGIBILITY OF THE ASSESSEE TO CLAIM ADDITIONAL DEPRECIATION. WHEN THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION @ 20%, IN THE ABSENCE OF ANY SPECIFIC PROVISION, THE AO CANNOT CUT DOWN THE SCOPE OF DEDUCTION BY REFERRING TO SECOND PROVISO TO SECTION 32(1)(II) OF THE ACT. HE ALSO POINTED OUT THAT EVEN IF THERE IS ANY CONTRADICTION BETWEEN SECTIONS 32(1)(IIA) AND SECOND PROVISO TO SECTION 32(1)(II), IT HAS TO BE RECONCILED SO AS TO GIVE HARMONIOUS EFFECT TO THE LEGISLATIVE I NTENT. THE BENEFITS CONFERRED ON THE ASSESSEE BY WAY OF INCENTIVE PROVISION CANNOT BE TAKEN AWAY BY ADOPTING AN IMPLIED MEANING TO SECOND PROVISO TO SECTION 32(1)(II) OF THE ACT. SINCE THE SECOND PROVISO TO SECTION 32(1)(II) DOES NOT EXPRESSLY PROHIBIT THE ALLOWANCE OF THE BALANCE 50% DEPRECIATION IN THE SUBSEQUENT YEAR, SECOND PROVISO TO SECTION 32(1)(II) SHALL NOT BE INTERPRETED TO MEAN THAT IT IMPLIEDLY RESTRICT THE ADDITIONAL DEPRECIATION TO BE ALLOWED IN THE SUBSEQUENT ASSESSMENT YEAR. WE ARE OF THE V IEW THAT THE ASSESSEE NOW IS ENTITLED FOR 50% ADDITIONAL DEPRECIATION, BECAUSE IN THE YEAR IN WHICH THE MACHINERY WAS FIRST PUT TO USE THE ASSESSEE CLAIMED ONLY 50% OF ADDITIONAL DEPRECIATION FOR THE REASON THAT THE SAME WAS PUT TO USE FOR LESS THAN 180 DA YS, IN THIS ASSESSMENT YEAR FOR THE BALANCE OF DEPRECIATION. 16. BEFORE US, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF COORDINATE BENCH OF ITAT OF COCHIN IN THE CASE OF APOLLO TYRES LTD. VS. ACIT IN ITA NO. 616/COCH/2011 FOR AY 2007 - 08 DATED 20.12.2013 (UNREPORTED), WHEREIN THE BENCH HAS DECIDED THE ISSUE AS UNDER: 10. WE HAVE ALSO CAREFULLY GONE THROUGH THE SECOND PROVISO TO SECTION 32(1)(II) OF THE ACT, WHICH READS AS FOLLOWS: PROVIDED FURTHER THAT WHERE AN ASSET REFERRED TO CLAUSE (I) OR CLAUSE (II) OR CLAUSE (IIA), AS THE CASE MAY BE, IS ACQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND IS PUT TO USE FOR THE PURPOSE OF BUSINESS OR PROFESSION FOR A PERIOD OF LESS THAN ONE HUNDRED AND EIGHTY DAYS IN THAT PREVIOUS YEAR, THE DEDUCTION UNDER THIS SUB - SECTION IN RESPECT OF SUCH ASSET SHALL BE RESTRICTED TO FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSET UNDER CLAUSE (I) OR CLAUSE (III) OR CLAUSE (IIA) AS THE CASE MAY BE. 4 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 11. A BARE READING OF THIS SECTI ON 32(1)(IIA) CLEARLY SAYS THAT IN CASE A NEW MACHINERY OR PLANT WAS ACQUIRED AND INSTALLED AFTER 31 - 03 - 2005 BY AN ASSESSEE, WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCE OF ARTICLE OR THING, THE, A SUM EQUAL TO 20% OF THE ACTUAL COST OF THE MAC HINERY AND PLANT SHALL BE ALLOWED AS A DEDUCTION. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS ACQUIRED AND INSTALLED THE MACHINERY AFTER 31 - 03 - 205. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURE OF ARTICLE OR THING. THEREFORE THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION WHICH IS EQUIVALENT TO 20% OF THE ACTUAL COST OF SUCH MACHINERY. THE DISPUTE IS THE YEAR IN WHICH THE DEPRECIATION HAS TO BE ALLOWED. THE ASSESSEE HAS ALREADY CLAIMED 10% OF THE DEPRECIATION IN THE EARLIER ASSESSMENT YEAR SINCE THE MACHINERY WAS USED FOR LESS THAN 180 DAYS AND CLAIMING THE BALANCE 10% IN THE YEAR UNDER CONSIDERATION. SECTION 32(1)(IIA) DOES NOT SAY THAT THE YEAR IN WHICH THE ADDITIONAL DEPRECIATION HAS TO BE ALLOWED. IT SIMPLY SAYS THAT THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION EQUAL TO 20% OF THE COST OF THE MACHINERY PROVIDED THE MACHINERY OR PLANT IS ACQUIRED AND INSTALLED AFTER 31 - 03 - 2005. PROVISO TO SECTION 32(1)(IIA) SAYS HAST IF THE MACHINERY WAS ACQUIRED BY THE ASSESSING DU RING THE PREVIOUS YEAR AND HAS PUT TO USE FOR THE PURPOSE OF BUSINESS LESS THAN 180 DAYS, THE DEDUCTION SHALL BE RESTRICTED TO 50% OF THE AMOUNT CALCULATED AT THE PRESCRIBED RATE. THEREFORE, IF THE MACHINERY IS PUT TO USE IN ANY PARTICULAR YEAR, THE ASSESS EE IS ENTITLED FOR 50% OF THE PRESCRIBED RATE OF ADDITIONAL DEPRECIATION. THE INCOME - TAX ACT IS SILENT ABOUT THE ALLOWANCE OF THE BALANCE 10% ADDITIONAL DEPRECIATION IN THE SUBSEQUENT YEAR. TAKING ADVANTAGE OF THIS POSITION, THE ASSESSEE NOW CLAIMS THAT TH E YEAR IN WHICH THE MACHINERY WAS PUT TO USE THE ASSESSEE IS ENTITLED FOR 50% ADDITIONAL DEPRECIATION SINCE THE MACHINERY WAS PUT TO USE FOR LESS THAN 180 DAYS AND THE BALANCE 50% SHALL BE ALLOWED IN THE NEXT YEAR SINCE THE ELIGIBILITY OF THE ASSESSEE FOR CLAIMING 20% OF THE ADDITIONAL DEPRECIATION CANNOT BE DENIED BY INVOKING SECOND PROVISO TO SECTION 32(1)(II) OF THE ACT. 17. THE LD. SENIOR COUNSEL ALSO RELIED ON THE DECISION OF THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS. COSMO FILMS LTD. 1 39 ITD 628 (DEL) AND IN THE CASE OF ACIT VS. SIL INVESTMENT LTD. 148 TTJ 213 (DEL). THIS ISSUE WAS CONSIDERED BY THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF COSMO FILMS LTD. (SUPRA), WHEREIN CONSIDERING THE PROVISIONS OF SECTION 32(1)(IIA) AND SECOND P ROVISO TO SECTION 32(1)(II) OF THE ACT FOUND THAT WHEN THERE IS NO RESTRICTION IN THE ACT TO DENY THE BENEFIT OF BALANCE 50%, THE ASSESSEE IS ENTITLED FOR THE BALANCE ADDITIONAL DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEAR AND OBSERVED AS UNDER: THUS , THE INTENTION WAS NOT TO DENY THE BENEFIT TO THE ASSESSEE WHO HAVE ACQUIRED OR INSTALLED NEW MACHINERY OR PLANT. THE SECOND PROVISO TO SECTION 32(1)(IIA) RESTRICTS THE ALLOWANCES ONLY TO 50% WHERE THE ASSTS HAVE BEEN ACQUIRED AND PUT TO USE FOR A PERIOD LESS THAN 180 DAYS IN THE YEAR OF ACQUISITION. THIS RESTRICTION IS ONLY ON THE BASIS OF PERIOD OF USE. THERE IS NO RESTRICTION THAT BALANCE OF ONE TIME INCENTIVE IN THE FORM OF ADDITIONAL SUM OF DEPRECIATION SHALL NOT BE AVAILABLE IN THE SUBSEQUENT YEAR. S ECTION 32(2) PROVIDE FOR A CARRY FORWARD SET UP OF UNABSORBED DEPRECIATION. THIS ADDITIONAL BENEFIT IN THE FORM OF ADDITIONAL ALLOWANCE U/S. 32(1)(IIA) IS ONETIME BENEFIT TO ENCOURAGE THE INDUSTRIALIZATION AND IN VIEW OF THE DECISION OF HON'BLE SUPREME CO URT IN THE CASE OF BAJAJ TEMP LTD (SUPRA), THE PROVISIONS RELATED TO IT HAVE TO BE CONSTRUED REASONABLY, LIBERALLY AND PURPOSIVE TO MAKE THE PROVISION MEANINGFUL WHILE GRANTING THE ADDITIONAL ALLOWANCE. THIS ADDITIONAL BENEFIT IS TO GIVE IMPETUS TO INDUSTR IALIZATION AND THE BASIC INTENTION AND PURPOSE OF THESE PROVISIONS CAN BE REASONABLY AND LIBERALLY HELD THAT THE ASSESSEE DESERVES TO GET THE BENEFIT IN FULL WHEN THERE IS NO RESTRICTION IN THE STATUTE TO DENY THE BENEFIT OF BALANCE OF 50% WHEN THE NEW MAC HINERY AND PLANT WERE ACQUIRED AND USED FOR LESS THAN 180 DAYS. ONETIME BENEFIT EXTENDED TO ASSESSEE HAS BEEN EARNED IN THE YEAR OF ACQUISITION OF NE MACHINERY AND PLANT. IT HAS BEEN CALCULATED @ 15% BUT RESTRICTED TO 50 - % ONLY ON ACCOUNT OF USAGE OF THESE PLANT AND MACHINERY IN THE YEAR OF ACQUISITION. IN SECTION 32(1)(IIA), THE EXPRESSION USED IS SHALL BE ALLOWED . THUS, THE ASSESSEE HAD EARNED THE BENEFIT AS SOON AS HE HAD PURCHASED THE NEW MACHINERY AND PLANT IN FULL BUT IT IS RESTRICTED TO 50% IN THAT PARTICULAR YEAR ON ACCOUNT OF PERIOD USAGES. SUCH RESTRICTIONS CANNOT DIVEST THE STATUTORY RIGHT. LAW DOES NOT 5 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 PROHIBIT THAT BALANCE 50% WILL NOT BE ALLOWED IN SUCCEEDING YEAR. THE EXTRA DEPRECIATION ALLOWABLE U/S. 32(1)(IIA) IN AN EXTRA INCENTIVE WHICH HAS BEEN EARNED AND CALCULATED IN THE YEAR OF ACQUISITION BUT RESTRICTED FOR THAT YEAR TO 50% ON ACCOUNT OF USAGE./ THE SO EARNED INCENTIVE MUST BE MADE AVAILABLE IN THE SUBSEQUENT YEAR. THE OVERALL DEDUCTION OF DEPRECIATION U/S 32 SHALL DEFINITELY NOT EX CEED THE TOTAL COST OF MACHINERY AND PLANT. IN VIEW OF THIS MATTER, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DIRECT TO EXTEND THE BENEFIT. WE ALLOW GROUND NO.2 OF THE ASSESSEE S APPEAL. SINCE WE HAVE DECIDED GROUND NO.2 IN FAVOUR OF ASSESSEE, T HERE IS NO NEED TO DECIDE THE ALTERNATIVE CLAIM RAISED IN GROUND NO.3. THE SAME IS DISMISSED. 18. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE ORDERS OF COORDINATE BENCHES, CITED SUPRA, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT IN THIS ASSESSMENT YEAR ALSO. WE DIRECT THE AO ACCORDINGLY. WE FIND THAT THE ISSUE IS NOW COVERED AND THE ASSESSEE IS ENTITLED FOR THE BALANCE 50% ADDITIONAL DEPRECIATION IN VIEW OF SEC. 32(1)(IIA) OF THE ACT IN THE NEXT ASSESSMENT YEAR FOR REMAINING UNUTILIZED ADDITIONAL DEPRECIATION. 5. LD. COUNSEL FOR THE ASSESSEE, ALSO RAISED PROPOSITION OF LAW THAT WHEN THE ADDITIONAL DEPRECIATION WAS ALLOWED ON PLANT AND MACHINERY PURCHASED FOR POWER PLANT IN THE IMMEDIATE PRECEDING ASSESSMENT YEAR I.E. 2005 - 06, NOW IN THIS YEAR THE ADDITIONAL DEPRECIATION CANNOT BE DENIED. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE PROPOSITION LAID DOWN BY VARIOUS HIGH COURTS THAT ONCE DEDUCTION AVAILABLE FOR A SPECIFIED NUMB ER OF YEARS IS GRANTED IN THE INITIAL YEAR , IN THAT EVENTUALITY , THE AO CANNOT EXAMINE THE QUESTION OF ALLOWABILITY AGAIN AND DECIDE TO WITHDRAW THE RELIEF ALREADY GRANTED, WITHOUT DISTURBING THE DEDUCTION GRANTED IN THE INITIAL YEAR. WE HAVE CONSIDERED TH E ARGUMENTS OF LD. COUNSEL FOR THE ASSESSEE AND FOUND THAT ON THIS VERY ISSUE, WE HAVE ALREADY TAKEN A VIEW IN THE CASE OF DCIT VS. SELVEL ADVERTISING PVT. LTD. IN ITA NOS. 657 TO 659/KOL/2011 FOR AYS. 2006 - 07 TO 2008 - 09 DATED 01.01.2015, WHEREIN IT IS HEL D AS UNDER: 7.HOWEVER, LD. COUNSEL FOR THE ASSESSEE STATED THAT IN SISTER CONCERN S CASE I.E. SELVEL TRANSIT ADVERTISING PVT. LTD., THE FIRST YEAR WAS AY 2001 - 02 AND FOR BOTH AYS 2001 - 02 AND 2002 - 03 RETURNS WERE FILED BY ASSESSEE AND REVENUE ACCEPTED THE SAME U/S. 143(1) OF THE ACT. HOWEVER, ASSESSMENTS WERE TAKEN UP FOR SCRUTINY BY ISSUING NOTICE U/S. 143(2) OF THE ACT FOR AYS 2003 - 04, 2004 - 05, 2006 - 07 AND 2007 - 08 AND IN EACH OF THE ASSESSMENT YEAR DEDUCTION U/S. 80IA OF THE ACT WAS ALLOWED BUT FOR AY 2 003 - 04 THERE WAS DISPUTE WITH REGARD TO QUANTUM OF DEDUCTION U/S. 80IA OF THE ACT WHICH WAS RESORTED TO IN FAVOUR OF THIS ASSESSEE. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE PROPOSITION LAID DOWN BY VARIOUS HIGH COURTS THAT ONCE DEDUCTION AVAILABLE FOR A SPECIFIED NUMBER OF YEARS IS GRANTED IN THE INITIAL YEAR IN THAT EVENTUALITY THE AO CANNOT EXAMINE THE QUESTION OF ALLOWABILITY AGAIN AND DECIDE TO WITHDRAW THE RELIEF ALREADY GRANTED, WITHOUT DISTURBING THE DEDUCTION GRANTED IN THE INITIAL YEAR. 8. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF SAURASHTRA CEMENT & CHEMICAL INDUSTRIES LTD. VS. CIT (1980) 123 ITR 669 (GUJ.), WHEREIN THE RATIO LAID DOWN WAS AS UNDER: 6 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 THIS TAKES US TO THE QUESTIONS REF ERRED TO US IN INCOME - TAX REFERENCE NO. 239 OF 1975 AT THE INSTANCE OF THE REVENUE. WE DO NOT FIND ANY JUSTIFYING REASONS TO INTERFERE WITH THE ORDER OF THE TRIBUNAL SO FAR AS BOTH THESE QUESTIONS ARE CONCERNED. THE TRIBUNAL WAS PERFECTLY JUSTIFIED IN TAKI NG THE VIEW THAT IF THE RELIEF OF TAX HOLIDAY WAS GRANTED TO THE ASSESSEE COMPANY FOR THE ASSESSMENT YEAR 1968 - 69, THE ASSESSEE WAS ENTITLED TO CONTINUANCE OF THAT RELIEF FOR THE SUBSEQUENT FOUR YEARS AND THE ITO WOULD NOT BE JUSTIFIED IN REFUSING TO, CONT INUE THE ALLOWANCE FOR THE ASSESSMENT YEAR UNDER REFERENCE, I.E., 1969 - 70, WITHOUT DISTURBING THE RELIEF FOR THE INITIAL YEAR. AT THIS STAGE, IT SHOULD BE NOTED THAT FOR PURPOSES OF ENTITLEMENT TO THE RELIEF UNDER S. 80J, WHICH IS CORRESPONDING TO S. 15C O F THE 1922 ACT, AN INDUSTRIAL UNIT CLAIMING SUCH RELIEF MUST BE NEW, IN THE SENSE, THAT NEW PLANTS AND MACHINERIES ARE ERECTED FOR PRODUCING EITHER THE SAME COMMODITIES OR SOME DISTINCT COMMODITIES (VIDE TEXTILE MACHINERY CORPORATION LTD. V. CIT [1977] 10 7 ITR 195 (SC) AND CIT V. INDIAN ALUMINIUM CO. LTD. [1977] 108 ITR 367 (SC). IT SHOULD BE EMPHASISED THAT IT WAS COMMON GROUND BETWEEN THE PARTIES THAT THE ASSESSEE - COMPANY HAS INCREASED THE CAPACITY OF ITS CEMENT MANUFACTURING PLANT FROM 600 TONNES PER D AY TO 1,600 TONNES PER DAY BY SETTING UP NEW MACHINERY AND PLANT NECESSARY FOR THAT PURPOSE. IN OUR OPINION, THE TRIBUNAL WAS RIGHT WHEN IT EXPRESSED ITS VIEW THAT THE QUESTION INVOLVED WAS NOT A QUESTION WHETHER THERE WOULD BE NO BAR TO THE VIEW WHICH T HE ITO HAS TAKEN ON THE PRINCIPLE OF RES JUDICATA. THE NEXT QUESTION TO WHICH THE TRIBUNAL ADDRESSED ITSELF, AND IN OUR OPINION RIGHTLY, WAS WHETHER THE ITO WAS JUSTIFIED IN REFUSING TO CONTINUE THE RELIEF OF TAX, HOLIDAY GRANTED TO THE ASSESSEE - COMPANY FOR THE ASSESSMENT YEAR 1968 - 69, IN THE ASSESSMENT YEAR UNDER REFERENCE, THAT IS, 1969 - 70, WITHOUT DISTURBING THE RELIEF GRANTED FOR THE INITIAL YEAR. IT SHOULD BE STATED THAT THERE IS NO PROVISION IN THE SCHEME OF S. 80J SIMILAR TO THE ONE WHICH WE FIN D IN THE CASE OF DEVELOPMENT REBATE WHICH COULD BE WITHDRAWN IN SUBSEQUENT YEARS FOR BREACH OF CERTAIN CONDITIONS. NO DOUBT, THE RELIEF OF TAX HOLIDAY UNDER S. 80J CAN BE WITHHELD OR DISCONTINUED PROVIDED THE RELIEF GRANTED IN THE INITIAL YEAR OF ASSESSME NT IS DISTURBED OR CHANGED ON VALID GROUNDS. BUT WITHOUT DISTURBING THE RELIEF GRANTED IN THE INITIAL YEAR, THE ITO CANNOT EXAMINE THE QUESTION AGAIN AND DECIDE TO WITHHOLD OR WITHDRAW THE RELIEF WHICH HAS BEEN ALREADY ONCE GRANTED. THE LEARNED ADVOCATE FO R THE REVENUE, INVITED OUR ATTENTION TO CERTAIN OBSERVATIONS MADE BY THIS COURT IN CIT V. SATELLITE ENGINEERING LTD. [1978] 113 ITR 208 (GUJ), WHERE THE COURT WAS CONCERNED WITH THE QUESTION, WHETHER AN INDUSTRIAL UNDERTAKING WHICH DID NOT SATISFY THE P RESCRIBED CONDITIONS SO AS TO ENTITLE ITSELF TO THE RELIEF UNDER S. 80J IN THE INITIAL YEAR CAN SUCCESSFULLY CLAIM THE RELIEF, IF THE PRESCRIBED CONDITIONS ARE SATISFIED IN THE SUBSEQUENT YEARS. WE DO NOT THINK THAT THIS DECISION OF THIS COURT IN SATELL ITE ENGINEERING LTD.'S CASE [1978] 113 ITR 208 (GUJ) CAN BE OF ANY ASSISTANCE TO THE CAUSE OF THE REVENUE, BECAUSE THE QUESTION WITH WHICH THIS COURT WAS CONCERNED IN THAT CASE WAS ALTOGETHER A DIFFERENT ONE IN THE CONTEXT IN WHICH THE DIVISION BENCH W AS SPEAKING. IT SHOULD BE UNDERSTOOD THAT THIS IS SUBJECT TO THE RIGHT OF THE ITO TO ADJUST THE RELIEF BY FIXING THE QUANTUM HAVING REGARD TO THE RESPECTIVE CAPITAL EMPLOYED IN THE NEW UNDERTAKING IN THE YEAR WITH WHICH HE IS CONCERNED. IN THAT VIEW OF THE MATTER, THEREFORE, THE TRIBUNAL WAS PERFECTLY JUSTIFIED IN TAKING THE VIEW AS IT DID AND WE ANSWER QUESTION NO. 1, IN THE AFFIRMATIVE, THAT IS, AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 9 . LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DELHI PRESS PATRA PRAKASHAN LTD. (NO.2) (2013) 355 ITR 14 (DEL). WHEREIN IT HAS BEEN HELD AS UNDER: THE NEXT CONTROVERSY THAT NEEDS TO BE ADDRESSED IS WHETHER IT WAS OPEN FOR THE ASSESSING OFFICER TO DENY THE BENEFIT OF SECTION 80 - I OF THE ACT TO THE ASSESSEE HAVING ALLOWED THE BENEFIT TO THE ASSESSEE IN THE PRECEDING THREE YEARS. IT IS CONTENDED ON BEHALF OF THE ASSESSEE THAT IT WAS NECESSARY FOR THE ASSESSING OFFICER TO BE CONSISTENT WITH THE ASSESSMENT FOR THE EARLIER YEARS. THE QUESTION AS TO THE QUALIFICATION OF UNITS NOS. 2 AND 3 AS INDUSTRIAL UNDERTAKINGS AROSE IN THE EARLIER YEARS AND THE ASS ESSING OFFICER HAD 7 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 ACCEPTED THAT UNITS NOS. 2 AND 3 QUALIFIED FOR A DEDUCTION UNDER SECTION 80 - I OF THE ACT IN THE EARLIER YEARS. BY VIRTUE OF SECTION 80 - I(5) OF THE ACT DEDUCTION UNDER SECTION 80 - I OF THE ACT WAS AVAILABLE TO AN ASSESSEE IN THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS (SUCH ASSESSMENT YEAR BEING THE INITIAL ASSESSMENT YEAR) AND EACH OF THE SEVEN ASSESSMENT YEARS IMMEDIATELY SUCCEEDING THE INIT IAL ASSESSMENT YEAR. THIS NECESSARILY IMPLIED ONCE THE ISSUE AS TO ELIGIBILITY UNDER SECTION 80 - I OF THE ACT WAS EXAMINED AND ALLOWED IN THE INITIAL ASSESSMENT, THE SAME WAS ALLOWABLE IN THE SUBSEQUENT YEARS ALSO UNLESS THERE WAS ANY MATERIAL CHANGE IN THE SUCCEEDING YEARS. IT IS WELL SETTLED LAW THAT THE PRINCIPLES OF RES JUDICATA DO NOT APPLY TO INCOME - TAX PROCEEDINGS AND ASSESSMENT FOR EACH YEAR IS AN INDEPENDENT PROCEEDING. IT IS NOW EQUALLY WELL ESTABLISHED THAT ISSUES THAT HAVE BEEN SETTLED AND ACCEPTED OVER A PERIOD OF TIME SHOULD NOT BE REVISITED IN SUBSEQUENT ASSESSMENT YEARS IN THE ABSENCE OF ANY MATERIAL CHANGE WHICH WOULD JUSTIFY THE CHANGE IN VIEW. THE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG [1992] 193 ITR 321 (SC) HAS HELD THAT UNLESS THERE IS A MATERIAL CHANGE IN JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW THE EARLIER VIEW WHICH HAS BEEN SETTLED AND ACCEPTED OF A SEVERAL YEARS SHOULD NOT BE DISTURBED. THE RELEVANT EXTRACT FROM THE SAID JUDGMENT IS QUOTED BELOW (PAGE 329) : 'WE ARE AWARE OF THE FACT THAT STRICTLY SPEAKING RES JUDICATA DOES NOT APPLY TO INCOME - TAX PROCEEDINGS. AGAIN, EACH ASSESSMENT YEAR BEING A UNIT, WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATI NG THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUB SEQUENT YEAR. ON THESE REASONINGS IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER - AND, IF THERE WAS NOT CHANGE, IT WAS IN SUPPORT OF THE ASSESSEE - WE DO NOT THINK THE QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COMMISSIONER OF INCOME - TAX IN THE EARLIER PROCEEDINGS, A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN. WE ARE, THEREFORE, OF THE VIEW THAT THESE APPEALS SHOULD BE ALLOWED AND THE QUESTION SHOULD BE ANSWERED IN THE AFFIRMATIVE, NAMELY, THAT THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE INCOME DERIVED BY THE RADHASOAMI SATSANG WAS ENTITLED TO EXEMPTION UNDER SECTIONS 11 AND 12 OF THE INCOME - TAX ACT OF 1961.' THE DECISION OF THE SUPREME COURT IN T HE CASE RADHASOAMI SATSANG [1992] 193 ITR 321 (SC) WAS ON THE FACTS WHERE THE QUESTION AS TO THE ENTITLEMENT FOR EXEMPTION UNDER SECTION 4(3)(I) OF THE INDIAN INCOME - TAX ACT, 1922, HAD NOT BEEN GRANTED FOR THE ASSESSMENT YEAR 1939 - 40. THE ASSESSEE HAD C HALLENGED THE ASSESSMENT ORDER WHICH WAS ACCEPTED BY THE APPELLATE ASSISTANT COMMISSIONER WHO UPHELD THE ASSESSEE'S CLAIM FOR EXEMPTION. THIS VIEW WAS CONSISTENTLY FOLLOWED BY THE SUCCESSIVE ASSESSING OFFICERS TILL 1963 - 64. IN THESE CIRCUMSTANCES, THE S UPREME COURT HELD THAT THE VIEW THAT HAD BEEN SETTLED AND ACCEPTED OVER A PERIOD OF YEARS SHOULD NOT BE ALLOWED TO BE DISTURBED. 8 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 THIS COURT IN THE CASE OF CIT V. LAGAN KALA UPVAN [2003] 259 ITR 489 (DELHI), FOLLOWING THE DECISION OF THE SUPREME COURT I N THE CASE OF RADHASOAMI SATSANG [1992] 193 ITR 321 (SC) HAS ALSO HELD THAT WHERE A PARTICULAR VIEW HAS BEEN ACCEPTED BY THE ASSESSING OFFICER TO SEVERAL YEARS THE SAME CANNOT BE PERMITTED TO BE DEPARTED FROM UNLESS THERE IS SOME MATERIAL FACTS THAT JUSTI FIED SUCH A CHANGE. SIMILAR VIEW HAS BEEN EXPRESSED BY THIS COURT IN THE CASE OF MODI INDUSTRIES LTD. [2010] 327 ITR 570 (DELHI). IN THIS CASE, WHILE CONSIDERING A CLAIM OF DEDUCTION MADE BY AN ASSESSEE UNDER SECTION 80J OF THE ACT, THIS HIGH COURT HELD AS UNDER (PAGE 573) : 'THE SECOND QUESTION RELATES TO THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80J OF THE INCOME - TAX ACT IN RESPECT OF ITS NEW UNIT, NAMELY, 10 TON FURNACE DIVISION AND STEEL UNIT 'B'. THIS CASE PERTAINS TO THE ASSESSMENT YEAR 1976 - 77. A PERUSAL OF THE ORDER OF THE ASSESSING OFFICER WOULD REVEAL THAT FOR THE FIRST TIME, CLAIM UNDER SECTION 80J OF THE ACT WAS MADE BY THE ASSESSEE IN THE ASSESSMENT YEAR 1973 - 74. THE ASSESSEE WAS DENIED THAT CLAIM BY THE ASSESSING OFFICER. FOR THIS REASON, THE ASSESSING OFFICER DENIED THE CLAIM IN THIS ASSESSMENT YEAR AS WELL, TAKING NOTE OF THE FACT THAT THE MATTER PERTAINING TO 1973 - 74 WAS PENDING BEFORE THE INCOME - TAX APPELLATE TRIBUNAL. IT IS A MATTER OF RECORD THAT THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1973 - 74 WAS ALLOWED BY THE INCOME - TAX APPELLATE TRIBUNAL. THE EFFECT THEREOF WAS THAT THE ASSESSEE WAS GRANTED THE REQUISITE DEDUCTION UNDER SECTION 80J OF THE ACT FOR THE ASSESSMENT YEAR 1973 - 74. THE DEPARTMENT HAS SOUGHT REFERENCE UNDER SECTION 256(1) OF THE ACT WHICH REFERENCE APPLICATION WAS ALSO REJECTED BY THE TRIBUNAL. LIKEWISE, FOR THE ASSESSMENT YEARS 1974 - 75 AND 1975 - 76, THE CLAIMS OF THE ASSESSEE WERE ALLOWED. THE ASSESSEE, ONCE GIVEN THE DEDUCTION UNDER SECTION 80J OF THE ACT IS ENTITLED TO SUCH A DEDUCTION FOR A PERIOD OF FIVE YEARS. IF THE ASSESSEE HAS BEEN ALLOWED THE BENEFIT OF SECTION 80J IN THE LAST THREE PRECEDING YEARS, THERE IS NO REASON TO DENY THE SAME FOR THE INSTANT ASSESSMENT YEAR. WE, THEREFORE, AN SWER THIS ISSUE ALSO IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE.' IN THE PRESENT CASE, THE CLAIM OF THE ASSESSEE UNDER SECTION 80 - I OF THE ACT WAS EXAMINED AND ALLOWED BY THE ASSESSING OFFICER FOR THREE YEARS PRECEDING THE ASSESSMENT YEAR 1991 - 92. IT IS RELEVANT TO NOTE THAT ASSESSMENTS IN THE EARLIER YEARS, I.E., RELATING TO THE ASSESSMENT YEARS 1988 - 89, 1989 - 90 AND 1990 - 91 HAS NOT BEEN DISTURBED BY THE ASSESSING OFFICER AND THERE HAS BEEN NO CHANGE THAT COULD JUSTIFY THE ASSESSING OFFICER ADOPTIN G A DIFFERENT VIEW IN THE ASSESSMENT YEARS 1991 - 92 AND THEREAFTER. AS STATED HEREINBEFORE, IN CERTAIN CASES WHERE THE ISSUES INVOLVED HAVE ATTAINED FINALITY ON ACCOUNT OF THE SUBJECT MATTER OF DISPUTE HAVING BEEN FINALLY ADJUDICATED, THE QUESTION OF REOPE NING AND REVISITING THE SAME ISSUE AGAIN IN SUBSEQUENT YEARS WOULD NOT ARISE. THIS IS BASED ON THE PRINCIPLE THAT THERE SHOULD BE FINALITY IN ALL LEGAL PROCEEDINGS. THE SUPREME COURT IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD. V. ITO [1977] 106 ITR 1 (SC) HAD HELD AS UNDER (PAGE 10) : '. . . THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AN D SET AT REST JUDICIAL AND QUASI - JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY.' IN THE FACTS OF THE PRESENT CASE, WHERE ALTHOUGH THE ASSESSING OFFICER HAS ALLOWED THE ASSESSEE DEDUCTION UNDER SECTION 80 - I OF THE ACT IN THE PRECEDI NG YEARS, ONE MAY STILL HAVE CERTAIN RESERVATIONS AS TO WHETHER THE ISSUE OF ELIGIBILITY OF UNITS NOS. 2 AND 3 FULFILLING THE CONDITIONS HAS BEEN FINALLY SETTLED, SINCE THE QUESTION HAS NOT BEEN A SUBJECT MATTER OF ANY APPELLATE PROCEEDINGS IN THE YEARS PR ECEDING THE ASSESSMENT YEAR 1991 - 92. HOWEVER, THERE IS YET ANOTHER ASPECT WHICH NEEDS TO BE CONSIDERED. BY VIRTUE OF 9 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 SECTION 80 - I(5) OF THE ACT, DEDUCTION UNDER SECTION 80 - I OF THE ACT IS AVAILABLE TO AN ASSESSEE IN RESPECT OF THE ASSESSMENT YEAR (REFER RED TO AS THE INITIAL ASSESSMENT YEAR) RELEVANT TO THE PREVIOUS YEAR IN WHICH THE INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS, OR TO OPERATE ITS COLD STORAGE PLANT OR PLANTS OR THE SHIP IS FIRST BROUGHT INTO USE OR THE BU SINESS OF THE HOTEL STARTS FUNCTIONING OR THE COMPANY COMMENCES WORK BY WAY OF REPAIRS TO OCEAN - GOING VESSELS OR OTHER POWERED CRAFT. SUCH DEDUCTION IS ALSO AVAILABLE FOR THE SEVEN ASSESSMENT YEARS IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR. SURELY IN CASES WHERE AN ASSESSEE IS HELD TO BE ELIGIBLE FOR DEDU CTION IN THE INITIAL ASSESSMENT YEAR, THE SAME CANNOT BE DENIED IN THE SUBSEQUENT ASSESSMENT YEARS ON THE GROUND OF INELIGIBILITY SINCE THE SET OF FACTS WHICH ENABLE AN ASSESSEE TO CLAIM TO BE ELIG IBLE FOR DEDUCTION UNDER SECTION 80 - I OF THE ACT OCCUR IN THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT YEAR AND HAVE TO BE EXAMINED IN THE INITIAL ASSESSMENT YEAR. IN SUCH CASES, WHERE THE FACTS ON THE BASIS OF WHICH THE DEDUCTIONS ARE CLAIMED ARE SUBJECT MATTER OF AN EARLIER ASSESSMENT YEAR AND DO NOT ARISE IN THE CURRENT ASSESSMENT YEAR, IT WOULD NOT BE POSSIBLE FOR AN ASSESSING OFFICER TO TAKE A DIFFERENT VIEW IN THE CURRENT ASSESSMENT YEAR WITHOUT ALTERING OR REOPENING THE ASSESSMENT PROCEE DINGS IN WHICH THE ELIGIBILITY TO CLAIM THE DEDUCTION HAS BEEN ESTABLISHED. IN CASES WHERE DEDUCTION IS GRANTED UNDER SECTION 80 - I OF THE ACT, THE APPLICABILITY OF THE SECTION IS DETERMINED IN THE YEAR IN WHICH THE NEW INDUSTRIAL UNDERTAKING IS ESTABLISHE D. THE QUALIFICATION AS TO WHETHER ANY INDUSTRIAL UNDERTAKING FULFILS THE CONDITION AS SPECIFIED UNDER SECTION 80 - I OF THE ACT HAS TO BE DETERMINED IN THE YEAR IN WHICH THE NEW INDUSTRIAL UNDERTAKING IS ESTABLISHED. ALTHOUGH THE DEDUCTION UNDER SECTION 8 0 - I OF THE ACT IS AVAILABLE FOR THE ASSESSMENT YEARS SUCCEEDING THE INITIAL ASSESSMENT YEAR, THE CONDITIONS FOR AVAILING OF THE BENEFIT ARE INEXTRICABLY LINKED WITH THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN WHICH THE NEW UNDERTAKING WAS FORMED . IN SUCH CIRCUMSTANCES, IT WOULD NOT BE POSSIBLE FOR AN ASSESSING OFFICER TO REJECT THE CLAIM OF AN ASSESSEE FOR DEDUCTION UNDER SECTION 80 - I OF THE ACT ON THE GROUND THAT THE INDUSTRIAL UNDERTAKING IN RESPECT OF WHICH DEDUCTION IS CLAIMED DID NOT FULFIL THE CONDITIONS AS SPECIFIED IN SECTION 80 - I(2) OF THE ACT, WITHOUT UNDERMINING THE BASIS ON WHICH THE DEDUCTION WAS GRANTED TO THE ASSESSEE IN THE INITIAL ASSESSMENT YEAR. THIS, IN OUR VIEW, WOULD NOT BE PERMISSIBLE UNLESS THE PAST ASSESSMENTS ARE ALSO DISTURBED. THE ASSESSING OFFICERS OVER A PERIOD OF THREE YEARS BEING ASSESSMENT YEARS 1988 - 89, 1989 - 1990 AND 1990 - 1991 HAVE CONSISTENTLY ACCEPTED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80 - I OF THE ACT AND IT WOULD NOT BE OPEN FOR THE AS SESSING OFFICER TO DENY THE DEDUCTION UNDER SECTION 80 - I OF THE ACT ON THE GROUND OF NON - FULFILMENT OF THE CONDITIONS UNDER SECTION 80 - I(2) OF THE ACT WITHOUT DISTURBING THE ASSESSMENT FOR THE ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNITS NOS. 2 AND 3 WERE ESTABLISHED. THIS VIEW HAS ALSO BEEN ACCEPTED BY A DIVISION BENCH OF THE GUJARAT HIGH COURT IN THE CASE OF SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LTD. [1980] 123 ITR 669 (GUJ). IN THAT CASE, THE GUJARAT HIGH COURT HELD THAT W HERE RELIEF OF A TAX HOLIDAY HAD BEEN GRANTED TO AN ASSESSEE IN AN INITIAL ASSESSMENT YEAR IN WHICH THE CONDITIONS FOR GRANT OF TAX HOLIDAY HAD TO BE EXAMINED, DENIAL OF RELIEF IN THE SUBSEQUENT YEARS WOULD NOT BE PERMISSIBLE WITHOUT DISTURBING THE ASSE SSMENT IN THE INITIAL ASSESSMENT YEAR. THE RELEVANT EXTRACT FROM THE DECISION OF THE GUJARAT HIGH COURT IN SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LTD. [1980] 123 ITR 669 (GUJ) IS QUOTED BELOW (PAGE 675) : 'THE NEXT QUESTION TO WHICH THE TRIBUNAL ADDR ESSED ITSELF, AND IN OUR OPINION RIGHTLY, WAS WHETHER THE INCOME - TAX OFFICER WAS JUSTIFIED IN REFUSING TO CONTINUE THE RELIEF OF TAX HOLIDAY GRANTED TO THE ASSESSEE - COMPANY FOR THE ASSESSMENT YEAR 1968 - 69, IN THE ASSESSMENT YEAR UNDER REFERENCE, THAT IS , 1969 - 70, WITHOUT DISTURBING THE RELIEF GRANTED FOR THE INITIAL YEAR. IT SHOULD BE STATED THAT THERE IS NO PROVISION IN THE SCHEME OF SECTION 80J SIMILAR TO THE ONE WHICH WE FIND IN 10 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 THE CASE OF DEVELOPMENT REBATE WHICH COULD BE WITHDRAWN IN SUBSEQUENT YEARS FOR BREACH OF CERTAIN CONDITIONS. NO DOUBT, THE RELIEF OF TAX HOLIDAY UNDER SECTION 80J CAN BE WITHHELD OR DISCONTINUED PROVIDED THE RELIEF GRANTED IN THE INITIAL YEAR OF ASSESSMENT IS DISTURBED OR CHANGED ON VALID GROUNDS. BUT WITHOUT DISTURBING THE RELIEF GRANTED IN THE INITIAL YEAR, THE INCOME - TAX OFFICER CANNOT EXAMINE THE QUESTION AGAIN AND DECIDE TO WITHHOLD OR WITHDRAW THE RELIEF WHICH HAS BEEN ALREADY ONCE GRANTED.' THE DIVISION BENCH OF THE BOMBAY HIGH COURT IN THE CASE OF PAUL BROTHE RS [1995] 216 ITR 548 (BOM) HAS ALSO ADOPTED THE VIEW EXPRESSED BY THE GUJARAT HIGH COURT IN THE CASE OF SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LTD. [1980] 123 ITR 669 (GUJ). 10.WE HAVE GONE THROUGH THE PROVISION OF SECTION 80IA OF THE ACT AND THE RELEVANT SUB SECTIONS (2) GIVES MANDATE TO THE ASSESSEE THAT DEDUCTION AS SPECIFIED IN SUB - SECTION (1) MAY AT THE OPTION OF THE ASSESSEE BE CLAIMED BY HIM FOR ANY TEN CONSECUTIVE ASSESSMENT YEARS OUT OF FIFTEEN YEARS BEGINNING FROM THE YEAR IN WHICH THE UN DERTAKING OR THE ENTERPRISE DEVELOPS OR BEGINS TO OPERATE ANY INFRASTRUCTURE FACILITY. SUB - SECTION (5) SAYS ABOUT INITIAL ASSESSMENT YEAR AND THEREAFTER IN SUBSEQUENT ASSESSMENT YEARS FOR CLAIM OF DEDUCTION UNDER THIS SECTION BY PUTTING A CEILING OF TEN Y EARS. THE PERIOD WILL BE COUNTED FROM THE INITIAL ASSESSMENT YEAR AND THE ENTERPRISE OR THE UNDERTAKING WILL BE ALLOWED TO CHOOSE THE INITIAL YEAR FROM WHICH IT WANTS TO AVAIL DEDUCTION FOR FURTHER YEARS. THE CONCESSION HAS TO BE AVAILED WITHIN A SPAN OF 12 YEARS BEGINNING WITH THE YEAR OF OPERATION. THIS MEANS THAT AN ENTERPRISE OR UNDERTAKING WHICH CHOOSES THE FOURTH YEAR OF OPERATION AS THE INITIAL YEAR WILL GET DEDUCTION STARTING FROM THAT YEAR. THE REVENUE CAN SEE THE PRE - REQUISITE CONDITION FOR ALL OWANCE OF DEDUCTION TO AN ENTERPRISE OR AN UNDERTAKING IN THE VERY FIRST YEAR THE INITIAL YEAR OF CLAIM OF DEDUCTION. IN THE PRESENT CASE BEFORE US, THE ASSESSEE CLAIMED DEDUCTION U/S. 80IA OF THE ACT IN THE ASSESSMENT YEAR 2004 - 05 I.E. THAT WAS THE INITIA L ASSESSMENT YEAR AND IN THAT YEAR THE MATTER REGARDING THE CLAIM OF DEDUCTION HAS BECOME FINAL FOR THE REASON THAT HON'BLE CALCUTTA HIGH COURT HAS CONFIRMED THE ALLOWANCE OF DEDUCTION AND REVENUE HAS NOT CARRIED THE MATTER BEFORE HON'BLE SUPREME COURT. WH EREAS THE REVENUE HAS REFERRED THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF SKYLINE ADVERTISING PVT. LTD., SUPRA, BUT THAT CANNOT BE CONSIDERED AS PRECEDENT BECAUSE JURISDICTIONAL HIGH COURT HAS TAKEN A VIEW IN FAVOUR OF ASSESSEE AND THAT AL SO IN ASSESSEE S OWN CASE. THAT MEANS THE INITIAL AY I.E. 2004 - 05, ONCE THE CLAIM OF DEDUCTION IN RESPECT TO PRE - REQUISITE CONDITIONS FOR ALLOWANCE OF DEDUCTION HAS BEEN SATISFIED, THE SAME CANNOT BE QUESTIONED IN FUTURE YEARS UNLESS AND UNTIL THE REVENUE DISTURBS THE INITIAL ASSESSMENT YEAR. HON'BLE DELHI HIGH COURT IN THE CASE OF DELHI PRESS PATRA PRAKASHAN LTD. (NO.2), SUPRA HAS CONSIDERED THIS ISSUE BY FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG, SUPRA AND OF HON'B LE BOMBAY HIGH COURT IN THE CASE OF PAUL BROTHERS, SUPRA AND ALSO SAURASHTRA CEMENT & CHEMICAL INDUSTRIES LTD., SUPRA. SIMILAR ARE THE FACTS IN THE CASE OF SISTER CONCERNS OF THE ASSESSEE I.E. SELVEL TRANSIT ADVERTISING PVT. LTD. IN TERM OF THE ABOVE, WE CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE AND DISMISS THIS COMMON ISSUE OF REVENUE S APPEALS. WE FIND THAT THE ASSESSEE HAS CLAIMED ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT IN IMMEDIATELY PRECEDING ASSESSMENT YEAR 2005 - 06 AND CLAIM WAS ALLOW ED BY THE AO. ONCE THE CONDITIONS REGARDING CLAIM OF DEDUCTION OF DEPRECIATION ARE EXAMINED BY THE AO IN THE VERY FIRST YEAR, SUBSEQUENTLY HE CANNOT GO BACK AND SAY THAT THE ADDITIONAL DEPRECIATION IS NOT ALLOWED ON BUSINESS OF GENERATION OR GENERATION AN D DISTRIBUTION OF POWER WHEREAS THE ASSESSEE 11 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 IS IN THE BUSINESS OF MANUFACTURING OF POLYESTER FIBRES AND YARNS. IN SUCH CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT. 6. FURTHER, L D. COUNSEL FOR ASSESSEE ARGUED ON MERITS OF THE CASE ALSO THAT THE ASSESSEE IS ENGAGED IN MANUFACTURING OF POLYESTER, FIBERS AND YAR N S AND FOR THE SAME , IT HAS INSTALLED CAPTIVE POWER PLANT UNIT IN ITS INDUSTRIAL UNIT AT BHARUCH, GUJARAT. THE ASSESSEE HAS PURCHASED PLANT AND MACHINERY FOR ITS CAPTIVE POWER PLANT AND CLAIMED ADDITIONAL DEPRECATION. ACCORDING TO HIM, NOW THE ISSUE IS COVERED , WHERE THE ADDITIONAL DEPRECIATION ON CAPTIVE POWER PLANTS IS CLAIMED, BY THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V TEXMO PRECISION CASTINGS (2010) 321 ITR 481(MAD) . WE FIND THAT HON'BLE MADRAS HIGH COURT HAS CONSIDERED THE ISSUE AND HELD AS UNDER: - IN ORDER TO GIVE THE RELIEF SOUGHT FOR BY THE ASSESSEE THE TRIBUNAL RELIED ON ITS OWN DECISION IN THE CASE OF HI TECH ARAI LIMITED IN WHICH THE TRIBUNAL HAS HELD AS FOLLOWS: '8. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE NOTE THAT THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE I S BASICALLY GENERATING THE ELECTRICITY BY WIND MILLS FOR ITS OWN CONSUMPTION AND IT IS NOT THE BUSINESS OF THE ASSESSEE. THEREFORE, THE ASSESSES IS NOT ENTITLED FOR ADDITIONAL DEPRECIATION ON WIND MILLS, UNDER SECTION 32(1)(IIA). ON APPEAL, THE COMMISS IONER OF INCOME - TAX (APPEALS) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT IT IS NOT ESSENTIAL THAT THE ASSESSEE IS IN THE BUSINESS OF GENERATION OF ELECTRICITY. BUT, SINCE THE ASSESSEE IS GENERATING THE ELECTRICITY BY WINDMILLS, THE CONDITI ONS OF THE LAW ARE FULFILLED FOR CLAIMING ADDITIONAL DEPRECIATION. IT IS AN UNDISPUTED FACT THAT AFTER THE ADDITION OF TWO UNITS DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR, THE CAPACITY OF GENERATION OF POWER THROUGH WIND MILLS WAS ENHANCED BY 5 0 PER CENT. IN OUR VIEW, WHEN THE CENTRAL BOARD OF DIRECT TAXES IN ITS CIRCULAR HAS EXPLAINED THE POSITION OF CAPTIVE POWER UNIT AS WELL AS THE GENERATION AND GENERATION AND DISTRIBUTION OF POWER UNIT ON SAME FOOTINGS, THEN WE FIND NO MERIT IN THE APPEA L OF THE REVENUE ON THIS ISSUE. ACCORDINGLY, WE DECIDE THIS ISSUE AGAINST THE REVENUE. THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) IS UPHELD ON THIS ISSUE.' IT IS ALSO BROUGHT TO OUR NOTICE THAT THE SAID DECISION OF HI TECH ARAI LIMITED WAS T AKEN ON APPEAL BY THE REVENUE TO THIS COURT AND THIS COURT BY ORDER SEPTEMBER 1, 2009, IN T. C. APPEALS NOS. 670 AND 671 OF 2009 CIT V. HI TECH ARAI LTD. [2010] 321 ITR 477, DISMISSED THE APPEAL FILED BY THE REVENUE, IN WHICH ALSO, A QUESTION OF LAW IDE NTICAL TO THE ONE, WHICH IS FORMULATED IN THIS CASE, HAS BEEN FORMULATED AND PUT IN ISSUE BEFORE THE COURT AND THE DIVISION BENCH HELD AS FOLLOWS (PAGE 479) : '5. IN THE CASE ON HAND, THE ASSESSEE IS STATED TO HAVE SET UP TWO WIND MILLS IN ADDITION TO TH E ALREADY EXISTING FOUR WIND MILLS AND THEREBY INCREASED ITS POWER GENERATION CAPACITY BY ABOVE 50 PER CENT. IT IS TRUE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF OIL SEEDS, MOULDED RUBBER PARTS, REED VALUE ASSEMBLIES APART F ROM GENERATION OF POWER. AFTER THE INSTALLATION OF THE ADDITIONAL WIND MILLS, BOTH PRIOR TO AS WELL AS AFTER THE INSTALLATION OF THE ADDITIONAL WIND MILLS, THE ASSESSEE WAS USING WIND ENERGY FOR GENERATING POWER FOR ITS CAPTIVE CONSUMPTION APART FROM SE LLING THE SURPLUS POWER GENERATED TO THE TAMIL NADU ELECTRICITY BOARD. AS FAR AS 12 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 APPLICATION OF SECTION 32(1)(IIA) OF THE ACT IS CONCERNED, WHAT IS REQUIRED TO BE SATISFIED IN ORDER TO CLAIM THE ADDITIONAL DEPRECIATION IS THAT THE SETTING UP OF A NEW MA CHINERY OR PLANT SHOULD HAVE BEEN ACQUIRED AND INSTALLED AFTER 31ST MARCH, 2002, BY AN ASSESSEE, WHO WAS ALREADY ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. THE SAID PROVISION DOES NOT STATE THAT THE SETTING UP OF A NEW MACHINERY OR PLANT, WHICH WAS ACQUIRED AND INSTALLED UP TO MARCH 31, 2002, SHOULD HAVE ANY OPERATIONAL CONNECTIVITY TO THE ARTICLE OR THING THAT WAS ALREADY BEING MANUFACTURED BY THE ASSESSEE . THEREFORE, THE CONTENTION THAT THE SETTING UP OF A WIND M ILL HAS NOTHING TO DO WITH THE POWER INDUSTRY, NAMELY, MANUFACTURE OF OIL SEEDS, ETC., IS TOTALLY NOT GERMANE TO THE SPECIFIC PROVISION CONTAINED IN SECTION 32(1)(IIA) OF THE ACT.' AS THE ISSUE IS ALREADY DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN THE ABOVE JUDGMENT, WE ARE OF THE VIEW THAT THE ORDER OF THE TRIBUNAL REQUIRES NO INTERFERENCE AT OUR HANDS AND THE APPEAL HAS TO BE DISMISSED AND ACCORDINGLY THE SAME IS DISMISSED. RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE MADRAS HIGH COURT IN THE CASE OF TEXMO PRECISION CASTINGS, SUPRA, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT ON BUSINESS OF GENERATION OR GENERATION AND DISTRIBUTION OF POWER AS CAPTIVE POWER PLANT TO BE USED FOR THE BUSINESS OF ASSESSEE I.E. MANUFACTURING OF POLYESTER FIBRES AND YARNS. ACCORDINGLY, THE ASSESSEE IS ENTITLED FOR ADDITIONAL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT AND WE ALLOW THE SAME. THIS GROUND OF APPEAL OF ASSESSEE IS ALLOWED. 7. NOW WE WILL DEAL WITH ITA NO. 774/KOL/2011 FOR THE AY 2006 - 07. ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE REVISION ORDER PASSED BY CIT - II, KOLKATA U/S 263 OF THE ACT, REVISING THE ASSESSMENT ORDE R FOR THE REASON THAT THE AO HAS ALLOWED EXCESS ADDITIONAL DEPRECIATION U/S 32(1) (IIA) OF THE ACT. FOR THIS ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THE IMPUGNED ORDER ISSUED BY THE LEARNED CIT IS BAD IN LAW AND VOID AB INITIO. 2(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN INITIATING THE REVISION PROCEEDINGS UNDER SECTION 263 OF THE ACT EVEN THOUGH THE CONDITIONS GOVERNING INITIATION OF PROCEEDINGS UNDER SECTION 263 OF THE ACT ARE NOT SATISFIED IN CASE OF APPELLANT. 2(B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS. 2( C) T HAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT FAILED TO APPRECIATE THAT WHERE TWO OPPOSITE VIEWS WERE EQUALLY POSSIBLE AND THE ASSESSING OFFICER HAVING FOLLOWED ONE OF THE VIEWS, THE ORDER OF THE ASSESSING OFFICER COULD NOT BE CONSTRUED AS ERRONEOUS, PARTICULARLY WHEN THE ORDER OF THE ASSESSING OFFICER DID NOT SUFFER FROM ANY LEGAL INFIRMITY. 2(D) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN HOLDING THAT THE ORDER OF THE ASSESSING OFFICER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT FAILED TO APPRECIATE THAT THE PROCEEDINGS UNDER SECTION 263 OF THE ACT COULD NOT BE INITIATED, WHEN THE AO HAD FULLY EXAMINED THE MATTER PERTAINING TO ADDITION AL DEPRECIATION. IT WAS ONLY AFTER DETAILED EXAMINATION, THE AO HAD MADE A 13 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 DISAL LOWANCE OF RS.78,03,220/ - BEING ADDITIONAL DEPRECIATION ON ENERGY SAVING DEVICES IN RESPECT OF EARLIER YEARS. 4. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN DIRECTING THE ASSESSING OFFICER TO DISALLOW THE CARRY FORWARD UN CLAIMED ADDITIONAL DEPRECIATION RS.42,430,186 ON THE ASSETS WHICH IS PUT TO USE FOR LESS THAN 180 DAYS IN AY 2005 - 06 AND CLAIMED IN THE SUBJECT ASSESSMENT YEAR. 5. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN DISREGARDING THE FACT THAT CARRY FORWARD OF UNCLAIMED ADDITIONAL DEPRECIATION OF PREVIOUS ASSESSMENT YEAR (I.E. AY 2005 - 06) IS NOT RESTRICTED UNDER THE PROVISIONS OF THE ACT. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN DISREGARDING THE FACT THAT WHERE TWO INTERPRETATIONS ARE POSSIBLE, THE ONE BENEFICIAL TO THE ASSESSEE HAS TO BE PREFERRED. 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ERRED IN DISREGARDING THE FACT THAT THE PROVISIONS OF THE ACT PERTAINING TO INCENT IVES, EXEMPTIONS AND DEDUCTIONS [SECTION 32(1)(IIA) OF THE ACT IN THE APPELLANT S CASE] , WHERE THE SPIRIT IS TO PROMOTE EXPORTS, INCREASE IN EARNING IN FOREIGN CONVERTIBLE EXCHANGE, PROMOTE INDUSTRIALIZATION, INFRASTRUCTURE DEVELOPMENT ETC., SHOULD BE LIBE RALLY CONSTRUCTED. 8. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT FAILED TO ISSUE A SPEAKING ORDER DISTINGUISHING THE REASONS PROVIDED BY THE APPELLANT IN FAVOUR OF CARRY FORWARD OF UNCLAIMED ADDITIONAL DEPRECIATION OF PREVIOUS YEAR IN THE SUBSEQUENT ASSESSMENT YEAR. 9(A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT HAS FAILED TO APPRECIATE THAT THE BALANCE ADDITIONAL DEPRECIATION @7.5% HAD ALREADY VESTED IN THE HANDS OF THE APPELLANT IN THE YEAR IN WHICH THE ASSETS HAD BEEN PURCHASED I.E. AY 2005 - 06. 9(B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ALSO FAILED TO PLACE RELIANCE ON SECTION 6 OF GENERAL CLAUSES ACT, 1 897 IN THE ABOVE MATTER. 10. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT PRAYS THAT IN CASE CARRY FORWARD OF UNCLAIMED ADDITIONAL DEPRECIATION OF PREVIOUS ASSESSMENT YEAR IS NOT ALLOWED TO BE CARRIED FORWARD IN SUBJECT ASSESSMENT YEAR, THE AMOUNT OF RS.4 2,430,186 SHOULD BE ADDED BACK TO THE OPENING WDV OF THE RELEVANT ASSESSMENT YEAR AND IT BE ALLOWED NORMAL DEPRECIATION ON THAT AMOUNT FOR THE RELEVANT ASSESSMENT YEAR AND IN THE SUBSEQUENT ASSESSMENT YEARS. 11. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT HUMBLY SUBMITS THAT THE UNCLAIMED ADDITIONAL DEPRECIATION FOR THE ASSETS PUT TO USE FOR LESS THAN 180 DAYS DURING AY 2005 - 06 AND CLAIMED IN THE SUBJECT ASSESSMENT YEAR TO THE TUNE OF RS. 7,803,220 HAS ALREADY BEEN DISALLOWED BY THE ASSESSING OFFICER IN ORDER UNDER SECTION 143(3) OF THE ACT. IT IS HUMBLY PRAYED THAT THE SAME SHOULD NOT AGAIN BE DISALLOWED ON THE BASIS OF ORDER UNDER SECTION 263 OF THE ACT SHALL SINCE IT WOULD AMOUNT TO DOUBLE DISALLOWANCE. 8. WE HAVE HEARD RIVAL CONTENT IONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT EXACTLY ON ABOVE ISSUES, AS DECIDED IN ITA NO.560/KOL/2010 FOR THE SAME AY 2006 - 07 AGAINST ASSESSMENT U/S. 143(3) OF THE ACT, THE CIT PASSED REVISION ORDER U/S. 263 OF THE ACT FOR REV ISING THE ASSESSMENT FRAMED U/S. 143(3) OF THE ACT DATED 05.12.2008 WHEREIN HE ALLOWED ADDITIONAL DEPRECIATION AMOUNTING TO RS. 4,15,48,628/ - @ 7.5% ON THE VALUE OF GENERAL PLANT & MACHINERY AND ALSO THE CLAIM OF ADDITIONAL DEPRECIATION AMOUNTING TO RS.8,8 1,558/ - @ 7.5% ON THE VALUE OF ENERGY SAVING DEVICES. ACCORDING TO CIT, SINCE THE MACHINERY AND ENERGY SAVING DEVICES WERE PURCHASED BEFORE 01.04.2005 NO ADDITIONAL 14 ITA NO.560/K/2010 & 774/K/2011 CENTURY ENKA LTD. AY 2006 - 07 DEPRECIATION SHOULD HAVE BEEN ALLOWED. ACCORDINGLY, HE DIRECTED THE AO TO RECONSIDER THE ISSUE AFRESH WHETHER THE ADDITIONAL DEPRECIATION ON THE ABOVE TWO ITEMS IS TO BE ALLOWED OR NOT. SINCE THIS ISSUE HAS ALREADY BEEN ADJUDICATED IN ITA NO. 560/KOL/2010 AND THE PROPOSITION DISCUSSED THEREIN, WE QUASH THE REVISION ORDER PASSED BY CIT U/S. 26 3 OF THE ACT AND THIS APPEAL OF ASSESSEE IS ALLOWED. 9 . IN THE RESULT, APPEAL S OF ASSESSEE ARE ALLOWED. 10 . ORDER IS PRONOUNCED IN OPEN COURT ON 0 2 . 0 1 . 2 0 1 5 S D / - S D / - , , ( SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 N D JANUARY, 2015 JD.(SR.P.S.) - COPY OF THE ORDER FORWARDED TO: 1 . / A PPELLANT CENTURY ENKA LIMITED, BIRLA BUILDING, 7 TH FLOOR, 9/1, R. N. MUKHERJEE ROAD, KOLKATA - 700 001. 2 / RESPONDENT DCIT CIRCLE - 6, KOLKATA. 3 . ( )/ THE CIT(A), KOLKATA 4. 5. / CIT , KOLKATA / DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, / BY ORDER, /ASSTT. REGISTRAR .